NATIONAL CABLE & TELECOMMUNICATIONS ASSOCIATION, INC. v. GULF POWER CO. ET AL.
No. 00-832
SUPREME COURT OF THE UNITED STATES
Argued October 2, 2001—Decided January 16, 2002
534 U.S. 327
*Together with No. 00-843, Federal Communications Commission et al. v. Gulf Power Co. et al., also on certiorari to the same court.
James A. Feldman argued the cause for petitioners in No. 00-843. With him on the brief were Solicitor General Olson, Acting Solicitor General Underwood, Acting Assistant Attorney General Nannes, Deputy Solicitor General Wallace, Robert B. Nicholson, Robert J. Wiggers, and Jane E. Mago. Peter D. Keisler argued the cause for petitioner in No. 00-832. With him on the briefs were Paul J. Zidlicky, Daniel L. Brenner, Neal M. Goldberg, David L. Nicoll, Paul Glist, John D. Seiver, and Geoffrey C. Cook. Anthony C. Epstein and William Single IV filed a brief for Worldcom, Inc., respondent under this Court‘s Rule 12.6, in support of petitioners in both cases.
Thomas P. Steindler argued the cause for respondents in both cases. With him on the brief for respondents American
JUSTICE KENNEDY delivered the opinion of the Court.
I
Since the inception of cable television, cable companies have sought the means to run a wire into the home of each subscriber. They have found it convenient, and often essential, to lease space for their cables on telephone and electric utility poles. Utilities, in turn, have found it convenient to charge monopoly rents.
Congress first addressed these transactions in 1978, by enacting the Pole Attachments Act, 92 Stat. 35, as amended,
In the original Act a “pole attachment” was defined as “any attachment by a cable television system to a pole, duct, conduit, or right-of-way owned or controlled by a utility,”
Cable companies had begun providing high-speed Internet service, as well as traditional cable television, over their wires even before 1996. The FCC had interpreted the Act to cover pole attachments for these commingled services, and its interpretation had been approved by the Court of Appeals for the District of Columbia Circuit. Texas Util. Elec. Co. v. FCC, 997 F. 2d 925, 927, 929 (1993). Finding nothing in the 1996 amendments to change its view on this question, the FCC continued to assert jurisdiction over pole attachments for these particular commingled services. In re Implementation of Section 703(e) of the Telecommunications Act of 1996: Amendment of the Commission‘s Rules and Policies Governing Pole Attachments, 13 FCC Rcd. 6777 (1998). In the same order the FCC concluded further that the amended Act covers attachments by wireless telecommunications providers. “[T]he use of the word ‘any’
Certain pole-owning utilities challenged the FCC‘s order in various Courts of Appeals. See
On the wireless question, the majority relied on the statutory definition of “utility“: “any person . . . who owns or controls poles, ducts, conduits, or rights-of-way used, in whole or in part, for any wire communications.”
Judge Carnes dissented on these two issues. In his view,
II
We turn first to the question whether the Act applies to attachments that provide high-speed Internet access at the same time as cable television, the commingled services at issue here. As we have noted, the Act requires the FCC to “regulate the rates, terms, and conditions for pole attachments,”
No one disputes that a cable attached by a cable television company, which provides only cable television service, is an attachment “by a cable television system.” If one day its cable provides high-speed Internet access, in addition to cable television service, the cable does not cease, at that instant, to be an attachment “by a cable television system.” The addition of a service does not change the character of the attaching entity—the entity the attachment is “by.” And this is what matters under the statute.
This is our own, best reading of the statute, which we find unambiguous. If the statute were thought ambiguous, however, the FCC‘s reading must be accepted nonethelеss, provided it is a reasonable interpretation. See Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 842-844 (1984). Respondents’ burden, then, is not merely to refute the proposition that “any attachment” means “any attachment“; they must prove also the FCC‘s interpretation is unreasonable. This they cannot do.
Some respondents now advance an interpretation of the statute not presented to the Court of Appeals, or, so far as our review discloses, to the FCC. They contend it is wrong to concentrate on whose attachment is at issue; the question, they say, is what does the attachment do? Under this approach, an attachment is only an attachment by a cable television system to the extent it is used to provide cable television. To the extent it does other things, it falls outside the ambit of the Act, and respondents may charge whatever
Respondents assert that “most major cable companies are now common carriers [since they also provide] residential and/or commercial telephone service.” Brief for Respondents American Electric Power Service Corp. et al. 20. If so, they contend, then for purposes of
Even if a cable company is a common carrier because it provides telephone service, of course, the attachment might still fall under the second half of the “pole attachments” definition: “any attachment by a . . . provider of telecommunications servicе.”
The Court of Appeals based its ruling on a different theory. The statute sets two different formulas for just and reasonable rates—one for pole attachments “used by a cable televisiоn system solely to provide cable service,”
This conclusion has no foundation in the plain language of
The sum of the transactions addressed by the rate formulas—
Likewise, nothing about the 1996 amendments suggests an intent to decrease the jurisdiction of the FCC. To the contrary, the amendments’ new provisions extend the Act to cover telecommunications. As we have noted, commingled services were covered under the statute as first enacted, in the views of the FCC and the Court of Appeals for the District of Columbia Circuit. Texas Util. Elec. Co. v. FCC, 997 F. 2d 925 (1993). Before 1996, it is true, the grant of authority in
The Court of Appeals held that
The FCC had to go a step further, because once it decided that it had jurisdiction over attachments providing commingled services, it then had to set a just and reasonable rate. Again, no rate challenge is before us, but we note that the FCC proceeded in a sensible fashion. It first decided that Internet services are not telecommunications services:
“Several commentators suggested that cable operators providing Internet service should be required to pay the Section 224(e) telecommunications rate. We disagree. . . . Under [our] precedent, a cable television system providing Internet service over a commingled facility is not a telecommunications carrier subject to the revised rate mandated by Section 224(e) by virtue of providing Internet service.” 13 FCC Rcd., at 6794–6795 (footnotes omitted).
After deciding Internet services are not telecommunications servicеs, the FCC then found that it did not need to decide whether they are cable services:
“Regardless of whether such commingled services constitute ‘solely cable services’ under Section 224(d)(3), we believe that the subsection (d) rate should apply. If the provision of such services over a cable television system is a ‘cable service’ under Section 224(d)(3), then the rate encompassed by that section would clearly apply. Even if the provision of Internet service over a cable television system is deemed to be neither ‘cable service’ nor ‘telecommunications service’ under the existing definitions, the Commission is still obligated under Sec-
tion 224(b)(1) to ensure that the ‘rates, terms and conditions [for pole attachments] are just and reasonable,’ . . . [a]nd we would, in our discretion, apply the subsection (d) rate as a ‘just and reasonable rate.‘” Id., at 6795–6796 (footnote omitted).
Respondents are frustrated by the FCC‘s refusal to categorize Internet services, and doubly frustrated by the FCC‘s contingent decision that even if commingled services are not “cable service,” those services nevertheless warrant the
We note that the FCC, subsequent to the order under review, has reiterated that it has not yet categorized Internet service. See, e. g., Pet. for Cert. in No. 00-843, p. 15, n. 4. It has also suggested a willingness to reconsider its conclusion that Internet services are not telecommunications. See, e. g., In re Inquiry Concerning High-Speed Access to Internet Over Cable and Other Facilities, 15 FCC Rcd. 19287, 19294 (2000). Of course, the FCC has power to reconsider prior decisions. The order under review in this litigation, however, is both logical and unequivocal.
If the FCC should reverse its decision that Internet services are not telecommunications, only its choice of rate, and not its assertion of jurisdiction, would be implicated by the reversal. In this suit, though, we address only whether pole attachments that carry commingled services are subject to FCC regulation at all. The question is answered by
Even if the FCC decides, in the end, that Internet service is not “cable service,” the result obtained by its interpretation of
This result is more sensible than the one for which respondents contend. On their view, if a cable company attempts to innovate at all and provide anything other than pure television, it loses the protection of the Pole Attachments Act and subjects itself to monopoly pricing. The resulting contradiction of longstanding interpretation—on which cable companies have relied since before the 1996 amendments to the Act—would defeat Congress’ general instruction to the FCC to “encourage the deployment” of broadband Internet capability and, if necessary, “to accelerate deployment of such capability by removing barriers to infrastructure investment.” Pub. L. 104-104, Tit. VII, §§ 706(a), (b), аnd (c)(1), 110 Stat. 153, note following
III
The second question presented is whether and to what extent the equipment of wireless telecommunications providers is susceptible of FCC regulation under the Act. The Eleventh Circuit held that “the act does not provide the FCC with authority to regulate wireless carriers.” 208 F. 3d, at 1275. All parties now agree this holding was overstated.
The dispute that remains becomes a narrow one. Are some attachments by wireless telecommunications providers—those, presumably, which are composed of distinctively wireless equipment—excluded from the coverage of the Act? Again, the dispositive text requires the FCC to “regulate the rates, terms, and conditions for pole attachments,”
Once more, respondents seek refuge in other parts of the statute. A “utility” is defined as an entity “who owns or controls poles, ducts, conduits, or rights-of-way used, in whole or in part, for any wire communications.”
In short, nothing in
The economic analysis may be correct as far as it goes. Yet the proposed distinction—between prototypical wire-based “associated equipment” and the wireless “associated equipment” which allegedly falls outside of the rationale of the Act—finds no support in the text, and, based on our present understanding of the record before us, appears quite difficult to draw. Congress may have decided that the difficulties of drawing such a distinctiоn would burden the orderly administration of the Act. In any event, the FCC was not unreasonable in declining to draw this distinction; and if the text were ambiguous, we would defer to its judgment on this technical question.
IV
Respondents insist that “any attachment” cannot mean “any attachment.” Surely, they say, the Act cannot cover billboards, or clotheslines, or anything else that a cable television system or provider of telecommunications service should fancy attaching to a pole. Since the literal reading is absurd, they contend, there must be a limiting principle.
The attachments at issue in this suit—ones which provide commingled cable and Internet service and ones which provide wireless telecommunications—fall within the heartland of the Act. The agency‘s decision, therefore, to assert jurisdiction over these attachments is reasonable and entitled to our deference. The judgment of the Court of Appeals for the Eleventh Circuit is reversed, and the cases are remanded for further proceedings consistent with this opinion.
It is so ordered.
JUSTICE O‘CONNOR took no part in the consideration or decision of these cases.
APPENDIX TO OPINION OF THE COURT
(a) Definitions
As used in this section:
(1) The term “utility” means any person who is a local exchange carrier or an electric, gas, water, steam, or other public utility, and who owns or controls poles, ducts, conduits, or rights-of-way used, in whole or in part, for any wire communications. Such term does not include any railroad, any person who is cooperatively organized, or any person owned by the Federal Government or any State.
(3) The term “State” means any State, territory, or possession of the United States, the District of Columbia, or any political subdivision, agency, or instrumentality thereof.
(4) The term “pole attachment” means any attachment by a cable television system or provider of telecommunications service to a pole, duct, conduit, or right-of-way owned or controlled by a utility.
(5) For purposes of this section, the term “telecommunications carrier” (as defined in section 153 of this title) does not include any incumbent local exchange carrier as defined in section 251(h) of this title.
(b) Authority of Commission to regulate rates, terms, and conditions; enforcement powers; promulgation of regulations
(1) Subject to the provisions of subsection (c) of this section, the Commission shall regulate the rates, terms, and conditions for pole attachments to provide that such rates, terms, and conditions are just and reasonable, and shall adopt procedures necessary and appropriate to hear and resolve complaints concerning such rates, terms, and conditions. For purposes of enforcing any determinations resulting from complaint procedures established pursuant to this subsection, the Commission shall take such action as it deems appropriate and necessary, including issuing cease and desist orders, as authorized by section 312(b) of this title.
(2) The Commission shall prescribe by rule regulations to carry out the provisions of this section.
(c) State regulatory authority over rates, terms, and conditions; preemption; certification; circumstances constituting State regulation
(1) Nothing in this section shall be construеd to apply to, or to give the Commission jurisdiction with respect to rates, terms, and conditions, or access to poles, ducts, conduits, and
(2) Each State which regulates the rates, terms, and conditions for pole attachments shall certify to the Commission that—
(A) it regulates such rates, terms, and conditions; and
(B) in so regulating such rates, terms, and conditions, the State has the authority to consider and does consider the interests of the subscribers of the services offered via such attachments, as well as the interests of the consumers of the utility services.
(3) For purposes of this subsection, a State shall not be considered to regulate the rates, terms, and conditions for pole attachments—
(A) unless the State has issued and made effective rules and regulations implementing the State‘s regulatory authority over pole attachments; and
(B) with respect to any individual matter, unless the State takes final action on a complaint regarding such matter—
(i) within 180 days after the complaint is filed with the State, or
(ii) within the applicable period prescribed for such final action in such rules and regulations of the State, if the prescribed period does not extend beyond 360 days after thе filing of such complaint.
(d) Determination of just and reasonable rates; “usable space” defined
(1) For purposes of subsection (b) of this section, a rate is just and reasonable if it assures a utility the recovery of not less than the additional costs of providing pole attachments, nor more than an amount determined by multiplying the percentage of the total usable space, or the percentage of the total duct or conduit capacity, which is occupied by the pole attachment by the sum of the operating expenses and
(2) As used in this subsection, the term “usable space” means the space above the minimum grade level which can be used for the attachment of wires, cables, and associated equipment.
(3) This subsection shall apply to the rate for any pole attachment used by a cable television system solely to provide cable service. Until the effective date of the regulations required under subsection (e) of this section, this subsection shall also apply to the rate for any pole attachment used by a cable system or any telecommunications carrier (to the extent such carriеr is not a party to a pole attachment agreement) to provide any telecommunications service.
(e) Regulations governing charges; apportionment of costs of providing space
(1) The Commission shall, no later than 2 years after February 8, 1996, prescribe regulations in accordance with this subsection to govern the charges for pole attachments used by telecommunications carriers to provide telecommunications services, when the parties fail to resolve a dispute over such charges. Such regulations shall ensure that a utility charges just, reasonable, and nondiscriminatory rates for pole attachments.
(2) A utility shall apportion the cost of providing space on a pole, duct, conduit, or right-of-way other than the usable space among entities so that such apportionment equals two-thirds of the costs of providing space other than the usable space that would be allocated to such entity under an equal apportionment of such costs among all attaching entities.
(3) A utility shall apportion the cost of providing usable space among all entities according to the percentage of usable space required for each entity.
(4) The regulations required under рaragraph (1) shall become effective 5 years after February 8, 1996. Any increase
(f) Nondiscriminatory access
(1) A utility shall provide a cable television system or any telecommunications carrier with nondiscriminatory access to any pole, duct, conduit, or right-of-way owned or controlled by it.
(2) Notwithstanding paragraph (1), a utility providing electric service may deny a cable television system or any telecommunications carrier access to its poles, ducts, conduits, or rights-of-way, on a non-discriminatory basis where there is insufficient capacity and for reasons of safety, reliability and generally applicable engineering purposes.
(g) Imputation to costs of pole attachment rate
A utility that engages in the provision of telecommunications services or cable services shall impute to its costs of providing such services (and charge any affiliate, subsidiary, or associate company engaged in the provision of such services) an equal amount to the pole attachment rate for which such company would be liable under this section.
(h) Modification or alteration of pole, duct, conduit, or right-of-way
Whenever the owner of a pole, duct, conduit, or right-of-way intends to modify or alter such pole, duct, conduit, or right-of-way, the owner shall provide written notification of such action to any entity that has obtained an attachment to such conduit or right-of-way so that such entity may have a reasonable opportunity to add to or modify its existing attachment. Any entity that adds to or modifies its existing attachment after receiving such notification shall bear a proportionate share of the costs incurred by the owner in making such pole, duct, conduit, or right-of-way accessible.
(i) Costs of rearranging or replacing attachment
An entity that obtains an attachment to a pole, conduit, or right-of-way shall not be required to bear any of the costs
JUSTICE THOMAS, with whom JUSTICE SOUTER joins, concurring in part and dissenting in part.
I join Parts I and III of the Court‘s opinion because I agree that the Pole Attachments Act,
Nevertheless, because the FCC failed to engage in reasoned decisionmaking before asserting jurisdiction over attachments transmitting these commingled services, I cannot agree with the Court that the judgment below should be reversed and the FCC‘s decision on this point allowed to stand. Instead, I would vacate the Court of Appeals’ judgment and remand the cases to the FCC with instructions that the Commission clearly explain the specific statutory basis on which it is regulating rates for attachments that provide commingled cable television service and high-speed Internet access. Such a determination would require the Commission to decide at long last whether high-speed Internet access provided through cable wires constitutes cable service or telecommunications service or falls into neither category.
I
As these cases have been presented to this Court, the dispute over the FCC‘s authority to regulate rates for attachments providing commingled cable television service and
It is not at all clear, however, that the disputed attachments at issue here—those providing both cable television programming and high-speed Internet access—are attachments for which neither of the Act‘s two specific rate methodologies applies. The FCC has made no determination with respect to this issue that this Court (or any other court) can review. Indeed, there is nothing in the record indicating whether any pole attachments currently exist that fall within the terms of
The disputed attachments here provide two distinct services: conventional cable television programming and high-speed Internet access. No party disputes the FCC‘s conclusion that conventional cable television programming constitutes cable service. See ante, at 333. Crucially, however, the FCC has made no determination as to the proper statutory classification of high-speed Internet access using cable modem technology. In fact, in asserting its authority to regulate rates for attachments providing commingled cable television service and high-speed Internet access, the Commission explicitly declined to address the issue: “We need not decide at this time . . . the precise category into which Internet services fit.” In re Implementation of Sec-
The statutory scheme, however, does not permit the FCC to avoid this question. None of the parties disputes that the two specific rate methodologies set forth in the Act are mandatory if applicable. If an attachment by a cable television system is used solely to provide cable service, the rate for that attachment must be set pursuant to the methodology contained in
Here, however, the FCC has failed to take either necessary step. For if high-speed Internet access using cable modem technology is a cable service,1 then attachments providing commingled cable television programming and high-speed Internet access are used solely to provide cable service, and the rates for these attachments must be regulated pursuant to
Only after determining whether either of the Act‘s mandatory rate methodologies applies to particular attachments and answering that question in the negative does the statute allow the FCC to examine whether it may define a “just and reasonable” rate for those attachments pursuant to
Instead, the FCC asks this Court to sustain its authority to regulate rates for attachments providing commingled cable television programming and high-speed Internet access, even though it has yet to articulate the specific statutory basis for its authority to regulate these attachments. Yet, as Justice Harlan noted some years ago: “Judicial review of [an agency‘s] orders will . . . function accurately and effica-
The FCC seems to hold open the following options: (a) Rates for attachments providing commingled cable television programming and high-speed Internet access may be regulated pursuant to
For these reasons, the FCC‘s attempt to regulate rates for attachments providing commingled cable television service and high-speed Internet access while refusing to classify the services provided by these attachments is “arbitrary, capricious,” and “not in accordance with law.”
II
Notwithstanding the FCC‘s failure to classify the services provided by the attachments at issue in these cases, the Court nonetheless concludes that the FCC‘s analysis below
A
First, the FCC has not conclusively determined that high-speed Internet access using cable modem technology is not a telecommunications service. Admittedly, the FCC‘s discussion of the topic in its order below was opaque.4 The
Commission, however, has since made its lack of a position on the issue unambiguous.
The FCC has not represented to this Court that high-speed Internet access provided through cable wires is not a telecommunicаtions service. To the contrary, it has made its agnosticism on the topic quite clear. In its petition for
Outside of this litigation, the FCC has also unambiguously indicated that it holds “no position” as to whether high-speed Internet access using cable modem technology constitutes a telecommunications service. For example, in an amicus curiae brief submitted to the United States Court of Appeals for the Ninth Circuit, the FCC stated: “To date, the Commission has not decided whether broadband capability offered over cable facilities is a ‘cable service’ under the Communications Act, or instead should be classified as ‘telecommunications’ or as an ‘information service.’ The answer to this question is far from clear.” Brief for FCC as Amicus Curiae in AT&T Corp. v. Portland, No. 99-35609 (CA9), p. 19.5 Just last year, in fact, the Commission issued a notice
of inquiry seeking comment on the proper statutory classification of high-speed Internet access using cable modem technology. See In re Inquiry Concerning High-Speed Access to Internet Over Cable and Other Facilities, 15 FCC Rcd. 19287 (2000). In this notice of inquiry, the FCC specifically sought comment on, among other issues, whether such Internet access “is a telecommunications service,” see id., at 19294, at no point indicating that the FCC had ever taken any position on the issue.
The Court‘s conclusion that the FCC has already decided that high-speed Internet access using cable modem technology is not a telecommunications service thus stands in stark contrast to the FCC‘s own view of the matter. “[T]he Commission has not determined whether Internet access via cаble system facilities should be classified as a ‘cable service’ subject to Title VI of the Act, or as a ‘telecommunications’ or ‘information service’ subject to Title II. There may well come a time when it will be necessary and useful from a policy perspective for the Commission to make these legal determinations.” In re Applications for Consent to the Transfer of Control of Licenses and Section 214 Authorizations from MediaOne Group, Inc., to AT&T Corp., 15 FCC Rcd. 9816, 9872 (2000) (footnote omitted).
The Court, however, does not dispute that reasoned decisionmaking required the FCC to make the “legal determination” whether high-speed Internet access using cable modem technology constitutes a telecommunications service nearly four years ago when the Commission asserted its authority
B
Second, even if the FCC had determined that high-speed Internet access provided through cable wires does not constitute a telecommunications service, these cases still would need to be remanded to the FCC. In order to endorse the FCC‘s primary argument that
This obviously suggests a dilemma: If all attachments covered by the Act are in fact addressed by the Act‘s specific rate methodologies, then the coverage of
Unable to provide a single example of an attachment not addressed by either of the Act‘s specific rate methodologies, the most the Court can argue is that “[t]he sum of the transactions addressed by the rate formulas . . . is less than the theoretical coverage of the Act as a whole.” Ante, at 336 (emphasis added). The Court, though, offers no reasoning whatsoever in support of this observation, nor does it have any basis in the record.
Leaving aside that which may or may not be theoretically possible, I do not have a view at the present time as to whether any attachments exist that are covered “pole attachments” under the Act, see
Congress may have believed that attachments were always used to provide cable service and/or telecommunications service and then taken great care to ensure that specified rate methodologies covered all attachments providing each of these services and both of these services.10 In
this vein, Congress in 1996 provided a new rate methodology for the new category of attachments added to the Act,11 see
It is certainly possible that Congress, in fact, has not provided an applicable rate methodology for all attachments covered by
III
For many of the same reasons given by the Court, I believe it is likely that the FCC, at the end of the day,
Moreover, such an interpretation of the 1996 amendments to the Act would be in substantial tension with two congressional policies underlying the Telecommunications Act of 1996. First, Congress directed the FCC to “encourage the deployment” of high-speed Internet capability and, if necessary, to “take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment.” See §§ 706(a), (b), and (c)(1), 110 Stat. 153, note following
That the FCC may have reached a permissible conclusion below, however, does not excuse its failure to engage in reasoned decisionmaking and does not justify the Court‘s decision to allow the Commission‘s order to stand.12 If the FCC
is to regulate rates for attachments providing commingled cable television programming and high-speed Internet access, it is required to determine whether high-speed Internet access provided through cable wires is a cable service or telecommunications service or falls into neither category. See Part I, supra. The Commission does not claim to have taken this step. As a result, the judgment of the Court of Appeals should be vacated, and the cases should be remanded to the FCC with instructions that the Commission identify the specific statutory basis on which it believes it is authorized to regulate rates for attachments used to provide commingled cable television programming and high-speed Internet access:
For all of these reasons, I respectfully dissent from Parts II and IV of the Court‘s opinion.
